Railway arches sold off with no thought for tenants, says watchdog

A £1.46bn sale of Network Rail’s property portfolio to private sector buyers was carried out without consideration of the impact on the lives and livelihoods of thousands of sitting tenants, Whitehall’s spending watchdog has found.

The National Audit Office (NAO) also found that the rent charged for 5,261 properties sold to Telereal Trillium and Blackstone Property Partners could increase by 54% over the next three to four years.

The deal, signed off in September, sparked anxiety and anger among tenants – including independent shops, garages and craft breweries – who feared that the new owners would impose unaffordable rents.

The NAO report, issued on Thursday, will fuel further criticism of Chris Grayling, the transport secretary, whose department oversaw last year’s sale.

Leni Jones, the director of Guardians of the Arches, which represents former Network Rail tenants, said ministers and the rail operator ignored small business owners and local communities until they protested. She said: “This report confirms that tenants’ interests were only considered during the sale process because we forced Network Rail and the government to listen. That was a major dereliction of duty by both Network Rail and the government.”